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Poking around the Space Hotel, on the northern edge of Melbourne’s city centre, is quite revelatory. The internet cafe downstairs is perhaps to be expected. The roof deck with sunbeds, a spa pool and free-to-use barbecue, less so. Then come the free shuttle buses to the beach, cinema room on level two, gym on level three and library with foosball table on level four.

What you might not expect to find here, though, are dorm rooms. It’s a hotel, but it’s also a hostel. Just one that doesn’t fit in with the outdated notion of what a hostel looks like, especially for those of us who haven’t stayed in one for a couple of decades.

There are two different sets of outdated notions, though. The first is of austere rooms of 30-odd bunks, having to do chores, being kicked out for the best part of the day and having to be back before an unreasonably early curfew.

That incarnation of hostels died a long time ago, but people who last stayed in one around 10-15 years ago will also have a mildly inaccurate idea of what to expect too. The dorm rooms at Space come with private lockers, power points, shelves and reading lights for each bed. When once it was just beds, and everything in a heap on the floor, the dorm rooms and the beds within them are instead being purpose-designed for guests.

The ‘flashpacker’ trend, with hostels adding more facilities and design innovations, is now well established. The Generator group, which has 8,639 beds in London, Paris, Copenhagen and elsewhere, is one of the prime movers here. Fredrik Korallus, CEO of the Generator group, says: “One of the most striking changes would be the meticulous curation of the design, art and social spaces inside the hostels. Go back 10 years and the vast majority of hostels were drab and unexciting.

“We’ve turned the hostel into a celebration of the shared experience, rather than just a way to save money. Our social spaces are buzzing with people interacting, socialising, eating, drinking and having fun, and have been designed to encourage this.”

This hasn’t gone unnoticed. In March, Generator sold for £395m. And the big boys are arriving, keen on further blurring the lines between hostels and hotels. Hybrid properties — such as Melbourne’s Space Hotel and Fusion in Prague — have been around for a few years now, although they tend to be slightly more hostel than hotel. Big money is now going into approaching this from the opposite direction.

In the US, Freehand is the trailblazer. It has opened properties in Miami and Chicago, with more in Los Angeles and New York on the way. There’s a top-down approach — bringing the appealing aspects of the hostel experience to hotels. That means stylish dorm rooms and more conventional hotel rooms in the same building.

Andrew Zobler, CEO of Freehand’s parent, the Sydell Group, believes it’s about the vibe. He says: “A lot of people who have money want to be around young, interesting people. They want that energy.”

The next to muscle in will be global hotel giant Accor. Last September it launched its plans for Jo&Joe (joandjoe.com), a brand that attempts to blend the best of the private rental, hostel and hotel formats. Think shared and private rooms, with an emphasis on social spaces. Its first ‘Open House’ was unveiled in the French surfing hotspot of Hossegor in June, with Quiksilver and Roxy partnerships.

And with plans to open 50 Jo&Joes by 2020 — starting in Paris and Bordeaux in 2018, followed by Budapest, Edinburgh, Lille, Rio and Berlin — they’re serious too. The hostelling evolution is speeding up.

Jo & Joe

Hostels: Why not?

What does a hostel have that a hotel hasn’t?
In short, sociability. The hotel tradition is for guests to go to their room and keep themselves to themselves. In hostels, less time is spent in the room, and there’s a greater emphasis placed on the common areas. In the past, that meant a perfunctory kitchen and a lounge with a few sofas — now it might mean private cinemas, roof decks, pools and games rooms.

I can’t find any, they don’t show up online
There are hostels on the likes of Booking.com and Hotels.com, but they’ve a tendency to get buried as searches are by private room rather than bed. Specialist sites such as Hostelworld and Hostelbookers are a better bet when looking for them — prices can be compared by bed or by private room. There are also user reviews from people accustomed to staying in hostels; these are likely to be more savvy and directed than those on a hotel site. The YHA site (yha.org.uk) is good for booking YHA properties across the UK, while the Hostelling International site (hihostels.com) has a global reach.

On the TripAdvisor site, hostels tend to show up under the speciality lodging section, rather than within the hotels section.

But I can’t handle a dorm…
“Today nearly nine in 10 hostels have private rooms,” says Paul Halpenny, group director of supply at Hostelworld. “Yet, awareness of hostels having private rooms is quite low, so there’s some education to be done.”

And what are those rooms like? Well, it varies. At the simple end of the scale, they’re relatively spartan, but still perfectly acceptable. At the more designer, flashpacker end of the scale, they’re the equivalent of a good budget hotel room, with size being the usual trade-off rather than comfort.

I would, but the kids are with me
Paul Halpenny says 60% of Hostelworld’s bookings are made by solo travellers, but the demographics of hostelling are changing. And, along with the private rooms have come family rooms, providing a cheap option for travellers with children who might otherwise be priced out. YHA has four-bed family rooms in London from £49, for instance.

Sometimes these are little more than four-bed dorms that have been hived off for a private booking, but others are deliberately designed as family rooms, with one bunk on top of a double bed, for example.

I’ve no intention of cooking
Hostels increasingly come with on-site cafes and even bars — self-sufficiency is giving way to throwing more into the package, and hassle-free convenience is becoming more of a calling card for hostels than just the cheapest possible beds.

Caroline White, CEO of YHA England and Wales, sums up the emerging mentality of a modern hostel guest rather neatly when explaining that the YHA’s hostel bars now stock Prosecco: “When we opened up YHA Ambleside, in the Lake District, we completely sold out of Prosecco during the very first weekend.”

Or making my own bed
“All beds are now made for you,” says Caroline White. “As a guest, why should you have to make your own bed? We keep an eye on what our competitors are doing and having the beds made was something we were seeing in the private sector. We made this change a couple of years ago, and we changed the mattresses as part of the process.”

This isn’t universal yet, but there’s a move away from boarding school-esque responsibilities to being pampered. And the bed won’t be grim: customer demand has seen rock-hard or blancmange-soft mattresses go.

You’ll not have to bring a sleeping bag, either. Almost all hostels now have a strict no sleeping bag policy — something that was introduced when they twigged that bed bug infestations were coming from the sleeping bags being lugged from hostel to hostel.

I’m not walking down the corridor to the loo
At Freehand, all rooms have their own bathroom. In fact, private rooms in hostels are usually en suite affairs. Some dorms have bathrooms too. This trend has been going for over a decade, and is set to continue. A good rule of thumb is a new, purpose-built hostel is more likely to have en suites, while in an old building has lower odds.

But I need to stay connected
It’s the norm for even the most remote hostels to have free wi-fi. Owners have twigged that sharing via Facebook or Instagram is all part of the key sociability selling point that hostels have always had. Julian Ledger, CEO of YHA Australia, says: “With wi-fi commonplace, you’ll notice fewer public computers and almost every guest has a smartphone in their pocket and tablet in their bag.”

There’s a big group of us…
Group travel — whether it’s sports teams, family get-togethers or work retreats — is big business for hostels. And it’s something they’ve realised they can cater to far better than hotels, given that booking an entire dorm room means no sleeping with strangers. Some have even put in meeting rooms to cater to this.

Bookings for groups of less than 16 can be done online at the YHA England and Wales site, while there’s also a separate subsite for any groups wanting to exclusively book the whole hostel. This can be remarkably cheap — the YHA at Hathersage in the Peak District sleeps 42 people and can be booked out for £231 a night.

This is by no means limited to the UK — YHA Australia operates a similar rent-a-hostel scheme, and several Hostelling International properties around the world have cottoned on to it.